Jay Chetan Kothari Vs ITO (ITAT Rajkot)
Political Party’s Non-Reporting Cannot Defeat a Proven Section 80GGC Donation
The Legal Principle
The Rajkot Tribunal held that a political party’s failure to account for a donation cannot, by itself, justify denying deduction to the donor, where the contribution and its acknowledgment are established through reliable evidence.
Following its earlier decision in Nikhil Nitinbhai Bhuptani, the Tribunal deleted the ₹6 lakh disallowance under section 80GGC and allowed the assessee’s appeal.
The distinction is significant: the donor must establish an actual qualifying contribution, but the recipient’s accounting omission does not automatically disprove that contribution.
Background of the Dispute
The assessee claimed a deduction of ₹6,00,000 under section 80GGC for a contribution made to a political party during the year relevant to Assessment Year 2024–25.
The Assessing Officer disallowed the deduction in an assessment under section 143(3) dated 2 March 2026. The CIT(A), through the National Faceless Appeal Centre, confirmed the disallowance by an order dated 19 August 2026.
The assessee then approached the Tribunal, challenging the denial of the political-contribution deduction.
The order is brief. It does not independently reproduce the complete assessment reasoning or provide a detailed inventory of the present assessee’s evidence. Instead, the Tribunal decided the issue by applying a coordinate Bench precedent after finding the facts similar.
Earlier Decision Covered the Controversy
At the hearing, the assessee’s authorised representative relied on Nikhil Nitinbhai Bhuptani, ITA No. 479/Rjt/2025, AY 2019–20, decided on 30 October 2025.
Counsel submitted that the earlier case concerned a political donation made through banking channels, with the political party’s registration effective at the time of the contribution.
The Departmental Representative supported the Assessing Officer’s findings.
The Tribunal found no reason to depart from the earlier decision and reproduced its reasoning concerning the documentary proof of donation and the consequences of the political party’s failure to account for it.
Documents Established Payment and Acknowledgment
In the reproduced precedent, the donation had been made to Rashtriya Komi Ekta Party.
The donor had furnished a receipt issued by the political party and its PAN, which matched the PAN appearing on the receipt. An Election Commission letter established the party’s registration under section 29A of the Representation of the People Act, 1951.
The evidence also included an email confirmation from the party and the donor’s bank statement. The banking entries corroborated the contribution and corresponded with the particulars recorded in the receipt.
Thus, the claim rested on consistent evidence identifying the recipient, establishing its registration and demonstrating payment and acknowledgment.
These detailed particulars relate to the precedent quoted in the present order. The Tribunal applied that precedent because it considered Jay Chetan Kothari’s facts similar.
Recipient’s Omission Was Insufficient to Deny Deduction
In the adopted reasoning, the tax authorities had discredited the supporting documents because the political party had not shown the donation in its return of income.
However, the evidence established that the donor had paid the amount to the registered political party and that the recipient had acknowledged receipt.
The Tribunal held that the donor could not be faulted merely because the political party failed to account for the amount received.
A reporting omission attributable to the recipient was therefore insufficient, by itself, to negate the transaction otherwise established by the donor’s evidence.
This principle formed the basis of relief in the present appeal.
No Distinguishing Material Produced by the Revenue
The Tribunal recorded that the facts were similar to those in Nikhil Nitinbhai Bhuptani and that there was no relevant change in facts or law.
It further noted that the Revenue had produced no material warranting departure from the coordinate Bench’s findings.
Following that precedent, the Tribunal deleted the ₹6 lakh addition arising from disallowance of the section 80GGC claim.
The appeal was allowed outright. The matter was not remanded for further verification.
Author’s Comments
The donor’s deduction should be tested against evidence of the donor’s transaction. Where payment, acknowledgment and the recipient’s qualifying status are established, an omission in the recipient’s return cannot automatically become a defect in the donor’s claim.
The evidentiary combination matters. The adopted precedent relied on banking records, a receipt, PAN particulars, registration evidence and confirmation. A bank debit alone was not the entire foundation of the decision.
Equally, this ruling does not establish that every payment described as a political donation must be allowed. Evidence of a fictitious contribution, return of money or another circumstance undermining genuineness would raise a different controversy. Those issues were not decided here.
The useful principle is therefore precise: a political party’s non-accounting, without material disproving an otherwise established contribution, is insufficient to deny the donor’s deduction.
For practitioners, maintaining an internally consistent documentary record remains essential. This enables the claim to be defended on the actual transaction rather than allowing the recipient’s reporting lapse to determine the donor’s tax treatment.
Cases Discussed
- Nikhil Nitinbhai Bhuptani Vs ITO (ITAT Rajkot) – ITA No. 479/Rjt/2025; Assessment Year 2019-20; Order dated 30/10/2025. Followed. The Tribunal held that where a political donation is established through banking records, receipts, registration evidence and acknowledgment, the donor cannot be denied deduction merely because the recipient political party failed to account for the amount in its return.
FULL TEXT OF THE ORIGINAL ORDER OF ITAT RAJKOT
Captioned appeal filed by the Assessee, pertaining to assessment year (AY) 2024-25, is directed against the order under section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the National Faceless Appeal Centre (NAC) Delhi/Commissioner of Income-tax (Appeals) [in short ‘NFAC/Ld.CIT(A)’], dated 19.08.2026, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Act, dated 02.03.2026.
2. Grounds of appeal raised by the assessee are as follows:
“The learned Commissioner of Income Tax (Appeals) erred in law and on facts in confirming the disallowance of the deduction of Rs.6,00,000/- claimed by the Appellant under section 80GGC of the Income-tax Act, 1961, in respect of the contribution made to a political party.”
3. When the appeal was called out for hearing, Ld. Counsel for the assessee invited my attention that the issue is squarely covered in favour of the assessee by the decision of the ITAT Rajkot, in the case of Nikhil Nitinbhai Bhuptani, in ITA No.479/Rjt/2025, for AY 2019-20, order dated 30.10.2025 and stated that the issue under consideration relating to political donation is squarely covered by the said judgment, wherein the Tribunal held that donation was made to Political Parties through banking channel and since the certificate of the Political Party was effective at the time of donation therefore addition made by the AO was deleted by the Tribunal.
4. On the other hand, Ld. DR for the revenue relied on the findings of the Assessing Officer.
5. I have heard, both the parties. I see no reason to take any other view of the matter, then the view so taken by the ITAT Rajkot Bench in the case of Nikhil Nitinbhai Bhuptani (supra) vide order dated 30.10.2025, in this order, the Tribunal has inter alia observed as follows:
“4. Appreciating the material on record it comes up that at page no. 5 of the paper book assesse has provided a copy of receipt of donation issued by Rashtriya Komi Ekta Party. PAN of Rashtriya Komi Ekta Party is made available at page no. 6, which is similar to one mentioned on the receipt. Further, at page nos. 7 & 8 assessee has provided a copy of letter dated 19.01.2001 from Election Commission of India, which recognizes Rashtriya Komi Ekta Party as a political party registered u/s 29A of the Representation of the People Act, 1951. A copy of ITR of Rashtriya Komi Ekta Party for relevant assessment year 2015-16 is provided at page no. 9. The assessee has also provided a copy of confirmation by way of email dated 19.12.2017 from Rashtriya Komi Ekta Party at page nos. 10 & 11 of the paper book. The extract of assessee’s bank statement, available at pages 12-22 of the paper book, corroborates the fact of donations being made to the said political party by banking channel and corresponds to the details mentioned in the receipt issued by the said political party as made available at page 5 of the paper book. However, this evidence is discredited by the tax authorities below on the basis that the said political party has not shown the donation in its return of income. The order of learned CIT(A) shows that aforesaid evidences were found to substantiate that assessee had paid donation to the registered political party. We are of the considered view that once the assessee had established, on the basis of material evidences, the fact of payment of the donation and the receipt acknowledged to the assessee then the mere fact that the political party on its part has failed to account for the donation received, the assessee as a donor cannot be faulted so as to deny the deduction. Grounds raised are sustained. Appeal of assessee is allowed with consequential effect.”
6. As the issue is squarely covered in favour of the assessee by the decision of the ITAT Rajkot Bench in the case of Nikhil Nitinbhai Bhuptani (supra), the assessee’s facts under consideration is similar to Nikhil Nitinbhai Bhuptani (supra) and, there is no change in facts and law and the Revenue is unable to produce any materials to controvert the aforesaid findings of the ITAT Rajkot Bench in case of Nikhil Nitinbhai Bhuptani (supra), therefore, I respectfully following the binding precedent of the ITAT Rajkot Bench, delete the addition made by the assessing officer.
7. In the result, the appeal of the assessee is allowed.
Order is pronounced in the open Court Today on 09/10/2026.
